WASHINGTON -- You still have to pay your taxes. But take comfort knowing that, if you don't, you no longer face having your case sent to a private debt collection agency that could begin dunning you. You'll just have to face IRS agents.

In what could be the beginning of a major shift away from privatization of government services in the new administration, the Internal Revenue Service has declined to renew the contracts of two private agencies that had been dunning delinquent taxpayers for 2007 and 2008.

The program began with high hopes that it would bring in some $1.4 billion in delinquent taxes. Since its inception, the privatization effort collected $80 million at a cost of $7.6 million.

But with a Democratic Congress since 2006 -- and especially since President's Obama's election-the program was doomed. Democrats don't like privatization.

"I want to strangle every effort at privatization," U.S. Rep. Bill Pascrell (D-8) told a cheering crowd of New Jersey letter carriers here the other day. "Just let me at it. That will be my focus."

He and Rep. Steve Rothman (D-9) joined House efforts for the last three years to block the IRS use of collection agencies. Rothman argued that the program allowed private companies access to "personal and sensitive information" about taxpayers.

The legislative campaign picked up growing support but never enough to ensure passage-certainly not enough to overcome a veto by former President Bush.

But, shortly after his election, Obama responded to a letter from Pascrell and other Democratic lawmakers by saying he would order a Treasury Department "review" the use of the private companies.

That review coincided with yet another push by House Democrats to pass legislation that would strip the IRS of any power to contract with private companies -- one that, this time, would not likely face a presidential veto.

IRS Commissioner Doug Shulman who, just months ago, had defended the program, clearly saw the benefits of conversion in the light of a new political day.

He recently issued a statement in which he said that, after a review, it was "reasonable to conclude" that using federal employees was "more cost effective" than using private contractors when working with the same backlog of cases.

Hardly an overwhelming endorsement of public over private enterprise-but enough. The IRS refused to renew contracts with the two agencies initially hired for the job.

"I believe this work is best done by IRS employees, and I believe we have strong support from the Administration and the Congress for increased IRS enforcement resources going forward," Shulman said.

He said the agency is expected to hire an additional 1,000 IRS agents to go after delinquent accounts.

The Association of Credit and Collection Professionals, a trade group that supported the privatization effort, had said that, in one year alone, the IRS had opted not to pursue more than two million tax delinquency cases amounting to more than $16 billion.

The association contended private contractors could do the job.

"For decades, PCAs-private collection agencies-have partnered with government agencies at the local, state and federal level to professionally and efficiently recover past due government debts," an association statement contended, citing the work of private contractors in collecting student loan payments.

But the program faced strong opposition from the union representing IRS agents.